Zumper systematically screened out low-income renters: report
Explosive report accuses VC-backed firm of routine discrimination
Zumper, a rental platform backed by Kleiner Perkins and the Blackstone Group, may have systematically prevented thousands of low-income renters from finding apartments on its platform, according to a report.
According to Business Insider, the San Francisco-based startup reportedly instructed employees to screen for tenants who received Section 8 housing vouchers and automatically disqualified those who inquired about available units. The firm labeled those renters “unserviceable,” according to the report.
Zumper categorically denied the allegations, with a spokesperson telling BI that “discrimination of any kind has never been tolerated.” The spokesperson said that applicants may have been disqualified based on “credit requirement or their budget.”
Since 2012, Zumper has raised $150 million to build an “end-to-end’ marketplace for rentals. Most recently, it closed a $60 million round of Series D funding in March 2020. Investors include Greycroft, Kleiner Perkins and Axel Springer, along with real estate players Blackstone Group, DivcoWest and Marcus & Millichap.
Multiple sources told Business Insider that discriminatory practices stemmed from Zumper Select, a rental brokerage that launched in 2017. To provide leads to agents in New York, Chicago, Houston, Atlanta and Denver, Zumper created filters on its website to screen prospects and develop a pipeline of deals.
Several sources who worked on Zumper’s renter qualification team, which vetted prospects, said managers told them to dismiss Section 8 candidates. “They told us to email the tenant back and say, ‘We don’t have any inventory that matches your criteria,’” one source said. Zumper’s customer relationship manager automatically screened out some renters before they were ever vetted.
A former manager told Business Insider they brought their concerns to high-level executives, and in 2018 or 2019, the company discontinued the automated screening. A spokesperson confirmed Zumper Select “is no longer part” of the company’s business.
Discriminating against renters who use Section 8 vouchers is illegal in many major markets, including New York and Chicago. But the pattern of prejudice in the industry remains widespread. A 2019 probe by Newsday found widespread bias among Long Island real estate brokers who steered minority buyers to certain neighborhoods.
[Business Insider] — E.B. Solomont